Decision 131/2007/QD-TTG on the 9th August 2007 of the Prime Minister on promulgating the regulation on the hire of foreign consultants in construction activities in Viet Nam

DECISION 131/2007/QD-TTG ON THE 9^TH AUGUST 2007 OF THE PRIME MINISTER ON PROMULGATING THE REGULATION ON THE HIRE OF FOREIGN CONSULTANTS IN CONSTRUCTION ACTIVITIES IN VIETNAM

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government on 25^th December 2001;

Pursuant to the Construction Law on 26^th November 2003;

In consideration of the proposal of the Minister of Construction,

Article 1. To promulgate together with this Decision the Regulation on hiring of foreign consultants in construction activities in Vietnam.

Article 2. This Decision takes effect 15 days after its publication in “CONG BAO.” To annul previous regulations contrary to the Regulation promulgated together with this Decision.

Article 3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, presidents of provincial/municipal People’s Committees, and concerned organizations and individuals shall implement this Decision.

Prime Minister
NGUYEN TAN DUNG

ON THE HIRE OF FOREIGN CONSULTANTS IN CONSTRUCTION ACTIVITIES IN VIETNAM

(Promulgated together with the Prime Minister’s Decision 131/2007/QD-TTg on August 9, 2007)

1. This Regulation provides for the hire of foreign organizations and individuals for provision of consultancy services in construction activities in Vietnam, which cover: construction planning, construction survey, formulation of investment projects for construction of works, design of construction works, management of investment projects for construction of works, supervision of execution of building works, selection of contractors in construction activities and a number of other consultancy services in construction activities in accordance with Vietnamese law.

2. When treaties to which the Socialist Republic of Vietnam is a contracting party or has acceded provide for the use of construction consultancy services in construction activities are different from those of this Regulation, those treaties prevail. 

Article 2. Principles for the hire of foreign consultants

1. Based on quality requirements of construction consultancy services, investors in construction of works, agencies or organizations formulating the construction planning schemes shall propose the hire of foreign consultants for provision of construction consultancy services, if necessary.

2. The hire of foreign consultants for provision of construction consultancy services must ensure the principles of competitiveness, cost saving and efficiency.

3. The hire of foreign consultants is not permitted for provision of construction consultancy services related to state secrets; when necessary, the hire must be approved by competent agencies.

4. Foreign consultants must fully satisfy all the capacity conditions relevant to the scope and content of hired construction consultancy services.

5. The hire of foreign consultants must comply with this Regulation and Vietnam’s relevant laws.

Article 3. Competence to decide the hire of foreign consultants

1. The investment deciders shall decide to hire and how to hire the foreign consultants to provide construction consultancy services related to investment project for construction of works.

2. The Presidents of provincial/municipal People’s Committees shall decide to hire and how to hire the foreign consultants to formulate the construction planning schemes in their provinces or cities. The Minister of Construction shall decide to hire and how to hire the foreign consultants to formulate construction planning schemes, which must be approved by the Prime Minister.

3. The hire of foreign consultants must be specified in the investment decision for investment project for construction of works or in the decision, in which planning tasks are approved for construction planning schemes.

There are two forms of the hire of foreign consultants: hire of experts and hire of organizations

1. The hire of experts is the hire of foreign individuals to provide construction consultancy services at the request of investors or agencies in charge of formulating the construction planning schemes.

2. The hire of organizations is the hire of foreign consultancy contractors or partnerships between foreign consultancy contractors and domestic consultancy contractors to provide the construction consultancy services at the request of investors or agencies in charge of formulating the construction planning schemes.

Article 5.- Competency capacity of the foreign consultants

1. Foreign consultants must provide and prove their legal person status and professional capacity when they participate in the selection of foreign consultants to provide construction consultancy services in Vietnam.

2. Besides the specifying capacity conditions required by Vietnam’s current law, bidding invitation dossiers for foreign consultants must supplement the following capacity conditions for consultancy experts and organizations, such as:

a) The hire of experts: Experts must have a construction consultancy practice license; have at least 5 years of construction consultation practice and have completed at least three construction consultancy services of the same kind with that to be hired;

b) The hire of organizations: Consultancy organizations must have the operation registration certificate, the legal person status, the full financial capacity, a adequate number of qualified experts and must have completed, as main contractors, at least 3 construction consultancy services of the same kind with that to be hired.

1. Foreign consultants must be selected in compliance with Vietnam’s current bidding law and this Regulation.

2. For construction planning schemes which must be selected through a contest, such contest must be organized prior to the selection of foreign consultants. The contest form and content shall be determined by the person competent to approve those construction planning schemes.

3. In the selection of foreign consultants, when many foreign consultancy organizations and individuals satisfy the required capacity conditions, priority is given to organizations or individuals that commit to train domestic consultants that join with them in providing construction consultancy services in order to improve the latters’ professional ability.

Article 7.- Cost management of the hire of foreign consultants

1. Cost of the hire of foreign consultants for construction consultancy services must be determined in conformity with the hiring party’s payment capacity, ensuring reasonable costs. This cost is within the project’s total investment budget under the regulations.

2. Cost of the hire of foreign consultants is determined by man-month estimates (according to the international practice) or by percentage (%). Cost estimate of the hire of foreign consultants is the total cost necessary to complete the hired construction consultancy service, including the cost of the hire of experts and other related cost plus all the taxes under the current law.

a) Cost of the hire of experts are determined based on the number of experts and each expert’s working time corresponding to his/her basic salary and all the costs calculated based on the expert’s basic salary, such as: social cost, management cost, profit, allowances and insurance cost. The number of experts and each expert’s working time are determined based on the volume of work needed to be done, work schedule requirement, professional level and each expert’s capability to handle the work. The level of experts’ basic salary and the costs calculated based on their basic salaries must be based on consultancy organizations’ audited financial operation reports or based on experts’ salary level stated in the expert hiring contracts which have been performed within the latest three years;

b) Other costs cover expert’s travelling expenses, expenses for working offices, expenses for meetings and workshops and other expenses (if any);

c) Payable taxes are determined according to Vietnamese current law.

The Ministry of Construction shall guide the determination of the hiring cost of foreign consultants in accordance with this Regulation.

3. In case of designation of a foreign consultancy contractor, the investor shall organize, asssess the hiring cost of foreign consultants and submit it to the investment decider (or the authorized person for projects to be decided by the Prime Minister) for approval. Provincial/municipal People’s Committees of the cities directly under the central government shall approve the hiring cost of foreign consultants to forrmulate the construction planning schemes in their provinces or cities. Agencies in charge of formulating the construction planning schemes shall approve the hiring cost of foreign consultants for the construction planning schemes approved by the Prime Minister.

4. Investors of investment projects for construction of works and agencies in charge of forrmulating the construction planning schemes may hire the qualified consultancy organizations to assess the cost estimates of the hire of foreign consultants prior to approval.

Article 8.- Contract management of the hire of foreign consultants  

1. Foreign consultants must be hired through consultancy contracts signed between investors of investment project for construction of works or agencies in charge of formulating the construction planning schemes and consultancy contractors.

2. Contents of the hiring contracts of foreign consultants must comply with Vietnamese law. Besides the main contents stipulating the scope of work, implementation duration, completed product, the hiring contracts of foreign consultants must specify the number and quality of consultants.

3. When a foreign consultancy contractor establish the joint venture with a domestic consultancy contractor or employs a domestic consultancy contractor as a subcontractor, in addition to prescribed contract contents, the hiring contracts of foreign consultants must clearly state the scope and volume of works as well as implementation costs of each contractor in the joint venture or of the main contractor and the subcontractor.

4. Investors of investment project for construction of works and agencies in charge of formulating the construction planning schemes are responsible for supervising the consistency of the provisions of hiring contracts of foreign consultants with the actual use of experts, working position arrangement, working time; volume, progress and quality of the completed construction consultancy service, which are used as the basis for work take-over and payment for hiring contracts of foreign consultants.

5. Contract prices of the hire of foreign consultants and contract provisions are the basis for investors of investment projects for construction works or agencies in charge of formulating the construction planning schemes to pay the consultancy contractor.

6. Cost of the hire of foreign consultants must be paid in compliance with the current regulations and the specific provisions in the hirring contracts of foreign consultants.

1. After being selected to provide the construction consultancy services in Vietnamese territory, the foreign consultancy contractors shall observe Clause 4, Article 7 of the Construction Law and the Prime Minister’s Decision 87/2004/QD-TTg dated May 19^th, 2004 promulgating  the Regulation on the management of foreign contractors’ operation in the construction industry in Vietnam.

2. In the course of providing construction consultancy services involving the construction criteria and norms, the foreign consultancy contractors shall comply with the provisions of Vietnamese law on the application of construction criteria and norms. When foreign construction criteria and norms are applied, such applications must be complied with relevant current legal documents.

3. Foreign consultancy contractors may not trade their contracts in any forms. In the course of supervising the contract performance, if contract breach or trading is detected, it shall be handled according to current regulations.

1. The Ministry of Construction shall guide and handle all the problems during the implementation of this Regulation.

2. Ministries, ministerial-level agencies, government-attached agencies, and provincial/municipal People’s Committees of the cities directly under the central government shall send annual reports on the implementation of this Regulation to the Ministry of Construction for sum-up and report to the Prime Minister.

Prime Minister
NGUYEN TAN DUNG